A few notes from Aqua Technology: This is an interesting article with an amazing number of good features. Unfortunately, it appears to be compiled from second hand information and written by an individual with no apparent hands-on experience in the water store business and thus must be read with a grain of salt and caution.
In the following article, the presumed chronology of how water developed is seriously out of focus with reality. The fact is the first water stores in America did not sell water at all. They focused on equipment, direct sales and other features; concepts which the author mistakenly believes are being invented today.
The most profitable and successful stores have been employing these "new and advanced" merchandising concepts for nearly 20 years.
The article's subtle push toward franchised water stores fails to recognize the repeated failure of major franchising efforts for such stores. Tens of millions of dollars have literally gone down the drain with unsuccessful franchising efforts---tens of millions with one failed effort in California alone---certainly a place where such a concept should succeed if it were properly planned and managed!
The most profitable and successful stores in America today are clearly the independently owned ones, free from the encumberments of unnecessary fees and franchisor "profit skimming" on already increasingly lower margin products; highly restricted product lines and in the end a bigger "ball and chain" than the one the new owner was trying to escape when he decided to enter the water business.
Even at this date, mid 2000, we are aware of no nationally known water organizations, with branded products, which can legitimately command legitimate franchising fees while providing measurable financial benefits to the store owner. McDonald's Water Store? Hardly!
Perhaps the most glaring problem with the concept being promoted in this article is the lack of an honest acknowledgement that water dealers of the "franchise stripe" are not fully informing consumers of ALL possible water treatment alternatives.
The unfortunate customer hears about only a handful of alternatives which characteristically are high profit items and are "politically correct" items to merchandise. This is "professional"? "Self-serving" is probably closer to reality.
The time for water stores is indeed here---but these water stores are not necessarily what the author of the following article has in mind.
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Come on down. We've got it all. Everything to do with water, that is!"
That's exactly what you could say if you owned a water store with a well stocked showroom.
Think of the possible advertising campaigns you could implement and how dramatically they would differ from the ones you may be presently utilizing:
"Bottled water to try, before you buy!"
"Try it, taste it and see the difference a home water treatment system can make!" or
"While you're here, let's take a look at all the systems we offer and have available to fit everyone's budget." are but a few examples.
Over the last 30 years, and even more recently, direct sales forces were utilized to inform customers about water conditioning systems or whole house filters; consumers, as a general rule, were unaware of these benefits.
The purity of the water coming from their taps was generally not in question. Now, the enormous growth of the bottled water industry has helped fuel consumer concerns about the purity of their tap water. Additionally, the growth has drawn attention to alternative solutions such as home drinking water products, pour-through filter pitchers and reverse osmosis systems.
Consumers today want to exercise their right to bring the level of their water quality up to their own individual standards. The trend has switched from being largely reactionary to one of a more preventative nature, requiring action.
Traditionally, dealerships don't showcase products for walk-in customers. Most are set up for telemarketing and service operations, which translates to office or administrative space including sales desks and meeting rooms, along with some warehouse space taking up the majority of square footage.
The retail water store puts the emphasis on show casing products and technologies in combination with offering bottled or vended water accessories and supplies. Let's talk about where these stores came from, and where they're going in the future.
>The Store Evolution
Twenty years ago, water stores started popping up in Western states such as Arizona and California, with some migrating east to southern states like Texas and Florida. Some flourished; others failed to survive more than a few years. The stores that did survive were typically small "mom and pop" operations.
Their growth was limited to the number of gallons they could dispense in a 30-day period, at 20-to-25 cents per gallon. These revenues were not very exciting to an investor or a water conditioning dealership accustomed to substantially higher margins and monthly sales volumes.
The water store then was premature to the market; consumers still needed to be educated and informed about the products and sold on the benefits. The direct sales approach continued to be the most effective approach.
Today, increasing attention from government agencies and the mass media are partially responsible for a new market trend. Consumers not only want information about their water, but readily available solutions as well.
Customers are drawn to stores that are visible, convenient and have a recognizable image. Other potential consumers turn to the Internet for their answers.
The Water Quality Association (WQA) receives hundreds of requests for information every week. If the consumer wants to make regular purchases, where do they presently go? Home improvement centers, mass merchandisers, highly visible water treatment companies and the Internet.
The timing for the water store/water center concept has never been more perfect.
>The Water Store of Today
Everything the consumer needs to know about water (is)under one roof. The many types of treatment systems offered today and the technology they offer can be overwhelming. The water store provides a solution to this problem. Experienced water treatment professionals are on-site to educate customers and help them make informed decisions.
In addition to expertise, the water store can offer purified water, pitchers, pumps, crocks and stands, water coolers, water conditioners, whole house filters and countertop filters. The water store of today literally has it all! It's the answer every end-user has been looking for. Everything they need---education, service and product-under one roof.
Sound like the right time to make the transition into a water store? If so, here are a few suggestions.
>Franchise or Independent?
First things first---you're going to need to do your homework. Would you rather venture ahead on your own, or should you investigate companies offering franchises or licensing agreements for water stores or centers? Both have their advantages and, of course, their disadvantages.
On one hand, operating as an independent means selecting your own name, operating your business on your own terms and implementing programs based on your individual decisions, creativity and preferences.
Although teaming up with a larger company may be more restrictive to your personal creativity, it can provide many resources not available to an independent proprietorship. Proven operating systems and procedures, sales and marketing assistance, regional or national advertising, coop purchasing, and brand recognition are just a few of the benefits.
Additionally, subsidiaries of larger operations are usually more attractive to investors when the time may come to sell the business.
Investigate this area thoroughly before going forward. At some future date, your decision will weigh heavily as to what parameters you'll be required to operate within, and eventually, to whom you can sell your business.
>High Profile a Must
If you're not presently operating from a showroom in a well traveled and highly visible location, you might want to reconsider where you're doing business. It could have an impressive impact on your bottom line.
Todays health conscience consumers seek out solutions to their water problems. A highly visible business offering several of those solutions and addressing all types of water problems stands a good chance of capturing those customers.
State location is just as important as ownership. Are you planning to serve the city water market, well water market, or possibly both? Will your store be freestanding or located in a shopping center next to a major anchor, such as a supermarket or home center?
Both offer distinct advantages that need to be considered in both short and long range planning. Demographics, as well as psychographics, the science of perceived market-place reality, telling you why a customer buys- should be thoroughly researched before committing to a long-term lease or the purchase of any property.
You might want to consider the assistance of a professional commercial property manager or leasing broker to help you make these decisions. Consistency builds customer loyalty, so don't plan on moving from one location to the next simply because the rent's cheaper down the street. You'll never know how much business you may be turning away.
An investment of time, money and lots of effort are required to build any successful business. It's essential to remain in the location you select for the long term in order to maximize your investment. No one should know your local water conditions and problem water markets better than you, so rely on your knowledge of the area when making these important decisions.
A high profiled, well-lit location is also important if you're planning on vending water after store hours, one way to continue bringing in revenues after the store is closed. A water vending machine can cover your monthly rent if in the right location. However, the dedication required to maintain this addition to your service offerings may not be worth the income if the location isn't right.
>Extend Product Lines, Marketing
Because they've learned that it requires much more than vended water-at 25 cents a gallon-to make the business profitable, successful store owners today offer many more products and services than their predecessors.
With an expanded product line, you have far more advertising possibilities. Use your creativity, or that of the franchiser, to capture your share of the market.
Since consumers are starting to seek solutions to water problems on their own, you need to attract them to your location. Remember, you're in the water store business now. The customer needs to come to you!
Setting appointments for in-home sales demonstrations formerly involved telemarketing and field canvassing. You now need to rely more heavily on advertising and public relations.
Home shows, county fairs, newspapers and radio are all viable methods of getting your message across. Grand openings, free water testing and consulting (at your store, in your showroom and in front of all your wonderful products, of course) in coordination with product give-a-ways are all effective.
Remember, your store has it all: Water bottles, water cooler rentals, counter-top filters and water conditioners. You have everything needed to treat the consumer's water. If you're going to get the interest of the consumer, you better let them know what you're all about.
Water stores and centers can provide the consumer with a place to find answers and solutions to their questions. The level of professionalism exhibited by employees, the retail layout of the store, as well as the consistency of the image or message delivered are the determining factors deciding which stores will be extremely successful and which will merely "get by."
As an additional tool, the WQA Certified Water Specialist can utilize the store concept to deliver the answers that go with a full range of products from which the consumer can choose.
The water store concept is here! It's alive and about to do very well in the months and years ahead, stretching from the West Coast all the way East. If you haven't considered making this transition in the near future, you may just want to reconsider.